I think I said my point wrong. I guess what I’m trying to say is that if you focus on a single transaction (which is a single customer’s perspective), real estate agents are grossly overpaid. If you add up all the hours you spend on a single transaction vs how much make from that single transaction, you are probably better compensated than the top brain surgeon’s in the world.

Then again, I doubt you are making $1 mil+ a year (or are you?). The simple sad fact of real estate is that it’s way too competitive because the per transaction profit is so high and the barrier of entry is so low. You have to spend so much time getting new customers and so little time servicing the existing ones. What if things shifted…

Let’s do a thought experiment here. Let’s say all real estate agents agreed to only put 1% commissions on both sides of every contract. I know your first thought would be “How could anyone survive with that”, but let’s examine this a little more. Imagine if you didn’t have to spend most of your time trying to get people to walk into your door and give you business. Imagine if you spent all your time dealing with the transactions themselves. If you had enough business that you could turn away all the obviously unmotivated buyers and only accept listings where the seller is being realistic.

Because the $12,000 paydays would be over, a lot of people would leave the profession and go back to whatever they did before someone said they should give real estate a shot. The diehards left would easily make up the reduced commission in total volume, and their time would be spent giving value to the individual customers rather than marketing themselves. Wouldn’t this truly be better for both parties? Your income would be very steady (because of the high transaction volume, and steady stream of customers) compared to what it is now, and people would have no good reason to gripe about how much a real estate agent makes on their home.

I’m not salaried. I work for myself. If I even hint that I’m available for work, I usually have two or three clients lined up ready to give me a project. My income fluctuates, and I get cancellations all the time. It’s just supply and demand, and few people want to go into my industry because it’s a hard industry to get up to speed on, and it’s a lot of late nights sitting in front of a computer working when you do. (that and you have to lie to all the girls you meet that you are a garbage man or something to get a date

Nevertheless I enjoy Kris & Steve’s informed and entertaining voice (one of the few in San Diego). Write on and I’ll keep reading.

Efforts to reform the real estate business, like Redfin, exist for a simple reason: people are often unhappy with and ill-served by the traditional business model. In many cases, it simply doesn’t work well and truly needs reform. So why not put all that effort into 1) acknowledging the problems, and 2) fixing them, rather than attempting to discredit the competition?

- I do not disagree with any of you that it is valuable and even encumbant on the buyer to do their own research and homework. Au contraire.

- I do not disagree with Alan that part of an agent’s duty to their buyer client is to research and education on market activity and comparable sales, and to advise on value. I DO disagree if you argue that the buyer has no responsibility or accountability in this area.

- To Frank, it just seems like more than five. They each usually leave more than one comment.

- To Sven, I totally get the perception by you, and many I’m afraid, that we are grossly underworked and overpaid. Of course, that is mostly a perception. I am guessing that you receive employee benefits, that you have job security and a steady income stream, probably some paid vacation, and I rather doubt you have to put money into the kitty each day until your assignment is completed. Further, if your boss changed his mind half-way through the project and decided to scrap your work, I suspect he would neither dock your pay nor keep your upfront entry fee. I know you have heard this all before, and that is why I will leave it at that. (P.S. That $30k number you are throwing around is so wrong on so many levels, I won’t even go there. If it was as simple and lucrative as you suggest, I would be living in Virgin Gorda right now).

- To Sven, again, you are sadly correct about your MLS observations. There are great agents, not-so-great agents, and really bad ones. Kind of like any profession, don’t you think?

-BUT, that is the great thing about this country. You have choices. You can choose among agents, you can choose among brokerages, or you can choose not to use one altogether. One size does not fit all. Between us and Redfin and the FSBO sign you can buy at Home Depot for $9.95, there’s something for everybody.

My past experiences with real estate agents was very similiar to Chester’s, and it’s probably the reason that companies like Redfin are doing so well. They are new to San Diego, and it’ll take a little time for them to achieve the success they have experienced in Seattle and San Fransisco.

I guess the point is that real estate agents always get mad at Redfin because “They don’t offer the same level of service.” and the consumer’s reaction is “What service?”. I had such a bad experience from real estate agents that I used to tell everyone “Don’t trust anyone that has to put their picture on their business card”.

Hell one glance at a handful of MLS listings, and I can point out incompetence everywhere. Listings that are in ALL CAPS, mispeld werds, blatantly wrong information, upside down pictures (or no pictures), pictures of a the beach 3 miles away, and useless hype (”better buy now before prices go up!”, I see this all the time). But damn, they have a nice picture that takes up half their business card.

The issue is that the real estate sales industry is ridiculously easy to get into, and it was way too good for way too long. If you are a real estate agent that really works hard on making sure your client has the best deal and no surprises going into a deal then it’s more likely that you are the exception. (citation needed, I know)

Let’s do a comparison. People working in the technical field are considered very well compensated due to limited supply and the overall difficulty of keeping up to date with their industry. I work was a technical consultant, and when I’m awarded a $30,000 contract, it easily takes me 400-500 hours of work to complete that contract. Now, I have over 10 years of professional experience, an education, and a lot of known information that I also bring to the table. Compare that to real estate where a million dollar house (very common in San Diego) can carry a $30,000 commission for each agent, and you don’t even need your degree in psychology. I’m sure some of the agents reading this forum have closed million dollar houses. Did you really work 400 hours? 200 hours? even 100 hours? on that one listing? (400 hours is 10 weeks of full time, 2.5 months, 9-5, five days a week of work) Do you really think you are worth that much more than me, and, if so, what do you bring to the table that really gives you that value?

(Note: You would be very hard pressed to fit 400 hours of work into a 45 day escrow period, working every day and weekends)

Your points are well taken. Due diligence in every business venture is a critical component. So why do you not do this when selecting an agent? If you think that the agents bottom line (all agents) is all they care about, then maybe you are good candidates for Redfin. You will then be taking responsibility for your actions with no one else to blame.